12% GST Slab: The next meeting of the GST Council may be held at the end of June or in July. During this meeting, a decision may be taken to abolish the 12% slab. After which some things will become cheaper and some will become expensive.
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GST Council Meeting: Currently, there are four slabs of GST in the country (5%, 12%, 18% and 28%). In the next meeting, the GST Council can take a big step to simplify the GST slabs. According to sources, the council is considering reducing it from four slabs to three. A proposal is being prepared by the council to remove the rate of 12%. This step is expected to be taken to simplify the tax structure. Sources claim that there is almost a consensus among the advisory officers of the GST Council that the 12% slab is no longer relevant.
Essential items expected to be kept in the 5% slab
According to the news published in HT, essential items used by common people can be kept in the 5% slab. The rest of the things can be shifted to the 18% slab. A source said, ‘This could be the best way to simplify the tax rates without affecting the revenue. However, any final decision on this will be taken by the GST Council.’ The next meeting of the GST Council can be held in late June or July. The GST Council consists of the Union Finance Minister and the Finance Ministers of the states. The last meeting was held in December 2024.
When will the GST Council meeting be held?
In the meeting to be held in June or July, along with easing the rates, ensuring its compliance, other matters are also expected to be discussed. A Group of Ministers (GoM) was formed in the 45th GST Council meeting on 24 September 2021 to ease the GST rates. This group was earlier headed by former Karnataka CM Basavaraj S Bommai. Later in November 2023, UP Finance Minister Suresh Kumar Khanna was given this responsibility. After this, on 27 February 2024, Bihar Deputy CM Samrat Choudhary became its convener.
What is included in the 12% slab?
Currently, there are four GST slabs in the country of 5%, 12%, 18% and 28%. Currently, less tax is kept on essential items and more tax is kept on luxury items. There is no tax on unpackaged food items, salt, milk, fresh vegetables, education and health service for the poor.
Items falling under 12% tax slab
> Condensed milk, caviar, drinking water packed in 20-litre bottles
> Walkie-talkies, tanks and armoured vehicles, contact lenses
> Cheese, dates, dry fruits, sauces
> Pasta, jam, jelly, fruit juice drinks, snacks
> Tooth powder, feeding bottles, carpets, umbrellas, hats
> Bicycles, household utensils, wooden or bamboo furniture
> Pencils, crayons, jute or cotton bags and shoes priced below Rs 1,000
> Diagnostic kits, marble and granite blocks
Experts’ opinion
Experts say the idea of removing the 12% slab is good. EY India’s tax partner Saurabh Agarwal said, ‘In the upcoming GST Council meeting, the focus will be on simplifying the tax slab. Removing the 12% slab and making it three rates will make things easier. It is important not to let the revenue get affected in this change. The 12% slab includes common man’s needs and industrial goods. Moving them to 5% or 18% slab can affect the revenue. The prices of things going from 12% to 18% slab may increase.
What will be cheaper and what will be expensive?
If the decision to remove the 12 percent tax slab is taken in the GST Council meeting, then the things coming under it will be shifted to 5 and 18 percent slabs. Items falling in the slab of 12 to 5 percent like spices and kerosene etc. are expected to become cheaper. On the other hand, items falling in the slab of 12 to 18 percent like detergents and plastic items etc. may become expensive.
Why change is necessary
In many developed countries, one or two slabs of GST are applicable. If the structure of three tax slabs is adopted, then India can come closer to global standards. Experts say that due to the continuous increase in GST revenue, there is a need to simplify the rates. In the year 2024-25, the total GST revenue increased by more than 9% to Rs 22,08,861 crore. It was Rs 20,18,249 crore in 2023-24. In the current financial year, a record collection of Rs 2,36,716 crore was made in April 2025. In May 2025 also, a revenue of Rs 2,01,050 crore came, this is the third largest collection till date.
